Why Kraft Heinz Stock Gained 12% Last Month
It's been a rough year for Kraft Heinz (NASDAQ: KHC) as the product of a blockbuster merger between Warren Buffett's Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) has gone sour, and investors have been forced to endure a dividend cut and an SEC investigation into its accounting practices. Nonetheless, investors got some good news last month as the stock finished June up 12%, according to data from S&P Global Market Intelligence, as the food maker completed an internal investigation and released its delayed 10-K annual report. Later in the month, Warren Buffett acknowledged he overpaid for his stake in the company, and Guggenheim analyst Laurent Grandet said Kraft Heinz "faces a monumental challenge as a stand-alone company" and questioned whether the company had enough cash to mount a turnaround. Through July 9, the stock has traded flat for the month. While some investors may see a turnaround opportunity here with the stock down 50% from its 52-week high and with a dividend yield of 5%, I wouldn't expect a quick recovery given the long list of problems the company faces as well as the secular headwinds from changing consumer tastes.